CH12 2

Business Research Methods
William G. Zikmund
Chapter 12: Experimental Research
Copyright 2000 by Harcourt, Inc.

All rights reserved. Requests for permission to make copies of any part of the work should be mailed to the following address: Permissions Department, Harcourt, Inc., 6277 Sea Harbor Drive, Orlando, Florida 32887-6777.
EXPERIMENT
A RESEARCH INVESTIGATION IN WHICH CONDITIONS ARE CONTROLLED ONE INDEPENDENT VARIABLE IS MANIPULATED (SOMETIMES MORE THAN ONE) ITS EFFECT ON A DEPENDENT VARIABLE IS MEASURED TO TEST A HYPOTHESIS
Copyright 2000 by Harcourt, Inc. All rights reserved
Basic Issues of Experimental Design
Manipulation of the Independent Variable Selection of Dependent Variable Assignment of Subjects (or other Test Units) Control Over Extraneous Variables
The experimenter has some degree of control over the independent variable. The variable is independent because its value can be manipulated by the experimenter to whatever he or she wishes it to be.
Experiment Treatment
Alternative manipulations of the independent variable being investigated
Independent Variable
The experimenter controls independent variable. The variables value can be manipulated by the experimenters to whatever they wish it to be.
MANIPULATION OF INDEPENDENT VARIABLE

Classificatory Vs. Continuous Variables Experimental and Control Groups Treatment Levels More Than One Independent Variable
Experimental treatments are the alternative manipulations of the independent variable being investigated.
DEPENDENT VARIABLE
its value is expected to be dependent on the experimenters manipulation criterion or standard by which the results are judged
DEPENDENT VARIABLE
SELECTION e.g... sales volume, awareness, recall MEASUREMENT
Dependent Variable
Selection
- e.g., sales volume, awareness, recall

Measurement
The dependent variable is so called because its value is expected to be dependent on the experimenters manipulation; it is the criterion or standard by which the results are judged.
TEST UNITS - subjects or entities whose response to the experimental treatment are measured or observed.
Two Types of Experimental Error
Constant Error
Random Errors
TWO TYPES OF EXPERIMENTAL ERRORS

CONSTANT ERRORS RANDOM ERRORS
FIELD VERSUS LABORATORY EXPERIMENTS
Controlling Extraneous Variables

Elimination of Extraneous Variables Constancy of Conditions Order of Presentation Blinding Random Assignment
How May an Experimenter control for Extraneous Variation? Eliminate Extraneous Variables
Hold Conditions Constant
Randomization
Matching Subjects
Establishing Control
DEMAND CHARACTERISTICS
EXPERIMENTAL PROCEDURES THE INTENTIONALLY HINT TO SUBJECTS SOMETHING ABOUT THE EXPERIMENTERS HYPOTHESIS
Demand Characteristics
Guinea Pigs
Hawthorne Effect
Field Vs. Laboratory Experiment
Laboratory Experiment
Artificial-Low Realism Few Extraneous Variables High control
Field Experiment
Natural-High Realism Many Extraneous Variables Low control
Low Cost
Short Duration Subjects Aware of Participation
High Cost
Long Duration Subjects Unaware of Participation
CONTROL GROUPS
Isolates Extraneous Variation
WHEN IS AN EXPERIMENT INTERNAL VALIDITY?

INTERNAL VALIDITY - THE ABILITY OF AN EXPERIMENT TO ANSWER THE QUESTION OF WHETHER THE EXPERIMENTAL TREATMENT WAS THE SOLE CAUSE OF CHANGES IN A DEPENDENT VARIABLE DID THE MANIPULATION DO WHAT IT WAS SUPPOSED TO DO?
FACTORS INFLUENCING INTERNAL VALIDITY
History
Instrumentation
Maturation
Testing
Selection
Mortality
ISOLATING EXTRANEOUS VARIATION WITH A CONTROL GROUP
History Effects
Maturation Effects Mortality Effects
Type of Extraneous Variable

History - specific events in the Environment between the Before and After Measurement That Are beyond the Experimenters Control Maturation - subjects Change during the Course of the Experiment Testing - The Before Measure Alerts or Sensitizes Subject to Nature of Experiment or Second Measure
Example
A Major Employer Closes Its Plant in Test Market Area
Subjects Become Tired Questionnaire about the Traditional Role of Women Triggers Enhanced Awareness of Women in an Experiment
Copyright 2000 by Harcourt, Inc. All rights reserved.
Instrument - Changes in Instrument Result in Response Bias
New Questions about Women are Interpreted Differently from Earlier Questions. Control Group and Experimental Group Is Self-Selected Group Based on Preference for Soft Drinks
Selection - Sample Selection Error Because of Differential Selection Comparison Groups
Mortality - Sample Attrition; some Subjects Withdraw from Experiment
Subjects in One Group of a Hair Dying Study Marry Rich Widows and move to Florida
HOW CAN INTERNAL VALIDITY BE INCREASE?
INCREASING INTERNAL VALIDITY

Control Group Random Assignment Pre-testing and Post-testing Posttest Only
WHAT ARE THE DIFFERENT BASIC EXPERIMENTAL DESIGNS?
Quasi-Experimental Designs
One Shot Design (After Only)
One Group Pretest-Posttest

Static Group Design
ONE SHOT DESIGN (AFTER ONLY) X O1
One Group Pretest-Posttest O1 X O2
Static Group Design
Experimental Group Control Group
X O1 O2
Three Good Experimental Designs
Pretest - Posttest Control Group
Design
Posttest Only Control Group Solomon Four Group Design
Pretest-Posttest Control Group Design
Experimental Group Control Group
R O1 X O2 R O3 X O4
Posttest Only Control Group
Experimental Group
O1
Control Group
O2
One-Shot Design Internal Validity Problems

History weak Maturation weak Testing not relevant Instrumentation not relevant Selection weak Mortality weak
One-Group Pretest-Posttest Internal Validity Problems

History weak Maturation weak Testing weak Instrumentation weak Selection controlled Mortality controlled
Static-Group Design Internal Validity Problems

History controlled Maturation possible source of concern Testing controlled Instrumentation controlled Selection weak Mortality weak
Pretest-Posttest Control Internal Validity Problems

History controlled Maturation controlled Testing controlled Instrumentation controlled Selection controlled Mortality controlled
Solomon Four-Group Design Internal Validity Problems

Posttest-Only Control Internal Validity Problems

Solomon four Group Design
Experimental Group 1: Control Group 1: Experimental Group 2: Control Group 2:
R O1 X O2 R O3 O4 R X O5 R X O6
ADVANCED EXPERIMENTAL DESIGNS ARE MORE COMPLEX

COMPLETELY RANDOMIZED RANDOMIZED BLOCK DESIGN LATIN SQUARE FACTORIAL
Completely randomized design

An experimental design that uses a random process to assign subjects (test units) and treatments to investigate the effects of only one independent variable.
Completely Randomized Designs

Control: Experimental Experimental no music treatment: treatment: slow music fast music
Average minutes 16 shopper spends in store
18
12
INDEPENDENT VARIABLE A
Level 1 Level 2 Level 3
Group A
Group B
Group C
Completely Randomized Design

With a pretest posttest
Group A
Group A Group A
R
R R
O1
O3 O5
X1
X2 X3
O2
O4 O6
Completely Randomized Design

With a posttest
Group A
Group B Group C
R
R R
X1
X2 X3
O1
O2 O3
Randomized block design

An extension of the completely randomized design in which a single extraneous variable that might affect test units response to the treatment has been identified and the effects of this variable are isolated by blocking out its effects.
Randomized Block Design

Independent Variables
Control: no music Experimental treatment slow music Experimental treatment: fast music
Blocking variable
Mornings and afternoons
Evening hours
Factorial design
An experiment that investigates the interaction of two or more variables on a single dependent variable.
Independent Variable 1
No Music Independent Variable 2 No Music cart signs Slow Music Fast Music
Grocery cart signs
Factorial Design -- Roller Skates

Price
$25 $30 $35
Red
Cell 1 Cell 2 Cell 3
Gold
Cell 4 Cell 5 Cell 6
Package Design
EFFECTS
Main effect The influence of a single independent variable on a dependent variable. Interaction effect The influence on a dependent variable by combinations of two or more independent variables.
2 x 2 Factorial Design
Ad A Men
Ad B 65
Effects > Main of Gender
Women
70 60
65
Main Effects of Ad
Interaction Between Gender and Ad Copy

100 90 80 70 60 50 40 30 20 10 Ad A Ad B
INDEPENDENT VARIABLE 1
Level 1 Level 2
INDEPENDENT VARIABLE 2
Level 1
Group A
Group B
Level 2
Group C
Group D
2 x 2 Factorial with a Pretest Posttest
Group A
O1
X11
O2
Group B
Group C Group D
R
R R
O3
O5 O7
X21
X12 X22
O4
O6 O8
2 x 2 Factorial Design with a Posttest Measure
Group A
X11
O1
Group B
Group C Group D
R
R R
X21
X12 X22
O2
O3 O4
A Test Market Experiment on Pricing

Sales in Units (thousands) Regular Price $.99
Test Market A, B, or C Test Market D, E, or F Test Market G, H, or I Test Market J, K, or L Mean Grand Mean
Reduced Price $.89 145 143 120 131 X2=134.75
Cents-Off Coupon Regular Price
130 118 87 84 X1=104.75 X=119.58
153 129 96 99 X1=119.25
LATIN SQUARE DESIGN

A balanced, two-way classification scheme that attempts to control or block out the effect of two or more extraneous factors by restricting randomization with respect to the row and column effects.
Order of Usage
1
SUBJECT
1 2 3
A B C B C A C A B
TEST MARKETING
Not just trying something out But scientific testing
Controlled experimentation
TEST MARKETING
AN EXPERIMENTAL PROCEDURE THAT PROVIDES AN OPPORTUNITY TO TEST A NEW PRODUCT OR A NEW MARKETING PLAN UNDER REALISTIC MARKET CONDITIONS TO MEASURE SALES OR PROFIT POTENTIAL
FUNCTONS OF TEST MARKETING
ESTIMATE OUTCOMES
IDENTIFY AND CORRECT WEAKNESSES IN PLANS
A Lengthy and Costly Procedure
$$$$$
When not to Test?
Loss of Secrecy
How Long Should a Test Last?

SELECTING A TEST MARKET

POPULATION SIZE DEMOGRAPHIC COMPOSITION LIFESTYLE CONSIDERATIONS COMPETITIVE SITUATION MEDIA SELF-CONTAINED TRADING AREA OVERUSED MARKETS - SECRECY
CONTROL METHOD OF TEST MARKETING

SMALL CITY LOW CHANCE OF BEING DETECTED DISTRIBUTION IS FORCED (GUARANTEED)
The advantages of using the control method of test marketing

Reduced costs Shorter time period needed for reading test market results Increased secrecy from competitors No distraction of company salespeople from regular product lines
SOME PROBLEMS ESTIMATING SALES VOLUME

OVERATTENTION UNREALISTIC STORE CONDITIONS READING COMPETIVE ENVIRONMENT INCORRECTLY INCORRECT VOLUME FORECASTS
ADJUSTED DATA PENETRATION AND REPEAT PURCHASE RATE
TIME LAPSE
High Tech Test Markets

Electric Test Markets Simulated Test Markets
Virtual-reality Simulated Test Markets

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Business Research Methods

Chapter 12: Experimental Research

Copyright 2000 by Harcourt, Inc.

Copyright 2000 by Harcourt, Inc. All rights reserved

Basic Issues of Experimental Design

Copyright 2000 by Harcourt, Inc. All rights reserved

MANIPULATION OF INDEPENDENT VARIABLE

Copyright 2000 by Harcourt, Inc. All rights reserved

Copyright 2000 by Harcourt, Inc. All rights reserved

Copyright 2000 by Harcourt, Inc. All rights reserved

- e.g., sales volume, awareness, recall

Copyright 2000 by Harcourt, Inc. All rights reserved

Copyright 2000 by Harcourt, Inc. All rights reserved

Two Types of Experimental Error

Copyright 2000 by Harcourt, Inc. All rights reserved

TWO TYPES OF EXPERIMENTAL ERRORS

Copyright 2000 by Harcourt, Inc. All rights reserved

FIELD VERSUS LABORATORY EXPERIMENTS

Copyright 2000 by Harcourt, Inc. All rights reserved

Controlling Extraneous Variables

Copyright 2000 by Harcourt, Inc. All rights reserved

Copyright 2000 by Harcourt, Inc. All rights reserved

Copyright 2000 by Harcourt, Inc. All rights reserved

Copyright 2000 by Harcourt, Inc. All rights reserved

Field Vs. Laboratory Experiment

Copyright 2000 by Harcourt, Inc. All rights reserved

Copyright 2000 by Harcourt, Inc. All rights reserved

Isolates Extraneous Variation

Copyright 2000 by Harcourt, Inc. All rights reserved

WHEN IS AN EXPERIMENT INTERNAL VALIDITY?

FACTORS INFLUENCING INTERNAL VALIDITY

Copyright 2000 by Harcourt, Inc. All rights reserved

ISOLATING EXTRANEOUS VARIATION WITH A CONTROL GROUP

Maturation Effects Mortality Effects

Copyright 2000 by Harcourt, Inc. All rights reserved

Type of Extraneous Variable

Instrument - Changes in Instrument Result in Response Bias

Selection - Sample Selection Error Because of Differential Selection Comparison Groups

Mortality - Sample Attrition; some Subjects Withdraw from Experiment

HOW CAN INTERNAL VALIDITY BE INCREASE?

Copyright 2000 by Harcourt, Inc. All rights reserved.

INCREASING INTERNAL VALIDITY

Copyright 2000 by Harcourt, Inc. All rights reserved

WHAT ARE THE DIFFERENT BASIC EXPERIMENTAL DESIGNS?

Copyright 2000 by Harcourt, Inc. All rights reserved.

One Shot Design (After Only)

One Group Pretest-Posttest

Copyright 2000 by Harcourt, Inc. All rights reserved

ONE SHOT DESIGN (AFTER ONLY) X O1

Copyright 2000 by Harcourt, Inc. All rights reserved

One Group Pretest-Posttest O1 X O2

Copyright 2000 by Harcourt, Inc. All rights reserved

Static Group Design

Experimental Group Control Group

Copyright 2000 by Harcourt, Inc. All rights reserved

Three Good Experimental Designs

Pretest - Posttest Control Group

Pretest-Posttest Control Group Design

Experimental Group Control Group

Copyright 2000 by Harcourt, Inc. All rights reserved

Posttest Only Control Group

Copyright 2000 by Harcourt, Inc. All rights reserved